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Selling gas too cheaply is a crime?
Posted by: McQ on Tuesday, May 08, 2007

Well maybe not "criminal:"
A service station that offered discounted gas to senior citizens and people supporting youth sports has been ordered by the state to raise its prices. Center City BP owner Raj Bhandari has been offering senior citizens a 2 cent per gallon price break and discount cards that let sports boosters pay 3 cents less per gallon.

But the state Department of Agriculture, Trade and Consumer Protection says those deals are too good: They violate Wisconsin's Unfair Sales Act, which requires stations to sell gas for about 9.2 percent more than the wholesale price.
Good grief. Come on, anyone, defend this intrusion by the state ... I'd be interested in your reasoning.
Bhandari said he received a letter from the state auditor in late April saying the state would sue him if he did not raise his prices. The state could penalize him for each discounted gallon he sold, with the fine determined by a judge.

Bhandari, who bought the station in May 2006, said he worries customers will think he stopped the discounts because he wants to make more money. About 10 percent of his customers had used the discount cards.

Dale Van Camp of Merrill said he bought a $50 card to support the local youth hockey program. It would have saved him about $100 per year on gas, he said.
Anyone want to defend this? Tell us how the government knows best? That this is a proper role for government? That this isn't another on a long list of improper intrusions by government?

Anyone?

(HT: Tom Scott)
 
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Comments
They violate Wisconsin’s Unfair Sales Act, which requires stations to sell gas for about 9.2 percent more than the wholesale price.
Just another case of the Government support for a cartel fixing prices and harming the public. I wonder who got paid off.
 
Written By: James E. Fish
URL: http://faroutfishfiles.blogspot.com/
How can I get a government protected profit margin for my business?
 
Written By: Harun
URL: http://
Create an Oligopoly...

Then yer freaking set for life...
 
Written By: Scott
URL: http://
If allowed to, wouldn’t the biggest gas companies just ’take it on the chin’ for a few months and sell gas at $0.50 cheaper than other companies. My thinking is that, while it certainly wouldn’t damn all of the bigger competition, it would, without a doubt, drive the smaller ones from the market (as they could not match the discount).

I’m just asking. I really have no idea.
 
Written By: Some Guy
URL: http://
Hmmmm.

Yup. It’s the same reason why there are anti-dumping laws. A financially strong company could potentially wipe out all competition by cutting prices too much and then, once the competition is gone, assume the mantle of a monopoly by raising prices through the roof.

And keep in mind that the profit margins for independent gas stations is pretty slim. A couple pennies per gallon of gas could easily mean the difference between a profit and closing.
 
Written By: memomachine
URL: http://www.memomachine.com
Aren’t there many many many businesses around the country that offer AARP discounts as well as discounts for high school activity cards?
 
Written By: JWG
URL: http://
Of course the government should be involved in this. Otherwise big companies would have to compete with the little guy who is willing to operate on smaller margins.

Why should large companies risk their capital in a price war? All it could give them is a potential monopoly position in the market at some point in the future. A position that will be transient because monopolies don’t last long in commodity based markets.

It’s much better for government to control the competition so the big companies can focus their assets in more lucrative long term investments, which keeps them profitable, which keeps gas flowing to the consumer (and the small gas stations).

This is obviously all for the benefit of the consumer and the small business owner, not the big companies. Government is actually protecting us from the big, bad oil companies.

See, it’s a win/win. How could that not be the role of government? They don’t pick the winner, they make everyone the winner. Right?
 
Written By: MJP
URL: http://
Will someone explain to me how, exactly, it is a benefit to the public at large to have to buy gas from small companies at higher prices? Doesn’t, like, our whole economy run on gas? When gas gets to $3 a gallon everybody starts complaining about profit-taking and windfalls, but then these same people will turn around and defend government price fixing at a higher level because it protects "the little guy?" Do you honestly check to see if your gas station is run by "the little guy"? Or do you just fill up and for all you know it could be owned by blood-drinking Satanists (or worse, clean-living Mormons, lol)?

I’m as little a guy as it gets, and I want my cheap gas!!!!
 
Written By: Wacky Hermit
URL: http://organicbabyfarm.blogspot.com
"If allowed to, wouldn’t the biggest gas companies just ’take it on the chin’ for a few months and sell gas at $0.50 cheaper than other companies."

Ah, the good old days. We used to call them "gas wars", but the price differences were only a few cents. Of course a $.50/gal. cut in prices by the big companies would certainly bring federal anti-trust action for predatory pricing.
 
Written By: timactual
URL: http://
Can’t defend and don’t want to, but I’m curious why a business is allowed to charge different prices to different customers for the same product just because their customers’ ages are different. Is age discrimination still legal in Wisconsin?
 
Written By: Doug Purdie
URL: http://
"but I’m curious why a business is allowed to charge different prices to different customers for the same product just because their customers’ ages are different."

Are you a native of this country? How have you avoided seeing innumerable discounts for senior citizens, or children under X, or any of innumerable other groups who get discounts for some reason? Why should a business not be allowed to charge whatever price it wishes?
 
Written By: timactual
URL: http://

 
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